If you live outside of the UK and receive rental income then you will be required to file a tax return. If the property is jointly owned then each owner will need to file a tax return.

This is the case even if there is no tax to pay.

If you have not yet registered with HMRC for self-assessment you can do so by completing form NRL1i. This will not only register you but HMRC will also notify your letting agent, if you have one, or your tenant, that you are registered with them.

Otherwise if the letting agent/tenant is applying the rules correctly, they will deduct 20% of the rent paid and send this directly to HMRC. You will then need to file a tax return to get this deduction back.

Registering under the Non-residents Landlord scheme does not exempt you from Income Tax it merely means that the letting agent/tenant does not have to deduct tax.

Travel to the UK from abroad is an allowable cost so long as the travel was “wholly and exclusively” for the purpose of the letting business.

The main exception to this is if you have appointed a letting agent to manage the property for you. HMRC maintain that if you have a letting agent that manages the property, it is the letting agents place of business from where the property is managed. As such only the travel from the letting agent’s offices to the rental property is allowable.

If you manage the property yourself you may be able to claim the cost of travelling to the UK to deal with managing or dealing with other aspects of letting the property. If there is any private element to your visit and there is a “duality of purpose” the cost will not be allowed for tax purposes.

Example 1

You come to the UK for 2 weeks. You handle a changeover of tenants but you also visit friends and family and go to a few tourist locations. In this case the whole of the travel cost would be disallowed under duality of purpose rules.

Example 2

You come to the UK for 2 days. During that time you handle the changeover of new tenants and deal solely with other letting related matters. You stay in a hotel and go out for a meal as part of your stay. You then return to your country of residence. In this case provided you have kept receipts and evidence of your stay (airline tickets, etc) you can claim for the travel, accommodation and meals would be allowable.

Rental income arising in the UK is subject to UK tax. Depending on your nationality and where you live you may be able to claim the UK personal tax allowance to set off against your rental income. You may also have to pay tax on your UK rental income in your country of residence. We therefore advise that you check this with a suitable qualified adviser in your country of residence.

So that you do not get taxed twice on the same income, the UK has double tax treaties with many countries to allow for tax relief from double taxation.

The Non-Resident Landlord Scheme is a scheme for taxing the UK rental income of persons whose “usual place of abode” is outside of the UK.

As a non-resident landlord you are required to register with HMRC under the Non Resident Landlord Scheme. This can now be done online by completing form NRL1i. HMRC will then process your registration and issue your self-assessment unique tax reference (UTR) to enable you to file tax returns. HMRC will also notify your letting agent, if you have one or your tenant that you are registered.

If you are not registered, your letting agent or tenant is required to deduct 20% of the rent received and pay this over to HMRC. The deduction can then only be refunded once you file your tax return. Registering under the Non-residents Landlord scheme does not exempt you from Income Tax it merely means that the letting agent/tenant does not have to deduct tax.

As a non-resident you are subject to UK IHT on your whole estate if you are UK domiciled and your estate is valued at over £325,000.

If you have a non-domicile status in the UK, only your UK based assets will be liable to inheritance tax in the UK.

Yes. Non-resident landlord companies must report their UK income by way of a CT600 return under the corporation tax system.

Please see our non resident company guide.

Residency is the place where you are living on a day to day basis and is considered each year. For UK Tax purposes, your residency is determined by the Statutory Residence Test.

Domicile is an intention to live in a place indefinitely rather than living in a country for a temporary purpose.

For more detailed guidance please see the residency vs domicile guide.

The UK personal tax allowance is £12,570 for 2021/22 until at least 2025/26.

If you are a British national it does not matter where you live as you are automatically entitled to this tax allowance against any UK income.

If you are a national of a country in the European Economic Area (EEA) you may be able to get the same tax allowances and reliefs as a UK resident. The EEA is:

Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein. Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK.

In addition to the above you would also be entitled to the personal allowance if you are:

• A national of Israel or Jamaica.

Or

• If you are a national AND also a resident of:

Argentina, Australia, Azebaijan, Bangladesh, Belarus, Bolivia, Bosnia and Herzegovina*, Botswana, Canada, Cote d’Ivoire, Croatia*, Egypt, Gambia, India, Indonesia, Japan, Jordan, Kazakhstan, Korea, Lesotho, Malaysia, Malta, Montenegro*, Morocco, New Zealand, Nigeria, Oman, Pakistan, Papua New Guinea, Philippines, Romania, Russian Federation, Serbia,*, South Africa, Sri Lanka, Sudan, Switzerland, Taiwan, Tajikistan, Thailand, Trinidad & Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, Uzbekistan, Venezuela, Vietnam.

(*Entitlement continues under the Double taxation Treaty the UK had with the former Yuogoslavia until such time as a new agreement takes effect.)

Non-residents did not pay any Capital Gains Tax before 5th April 2015.

All non-residents are required to pay Capital Gains Tax on any chargeable gains on residential property from 6th April 2015 and on commercial property from 6th April 2019.

If the relevant property was owned on 5th April 2015 (for residential property) or 5th April 2019 (for commercial property) then the market value at the relevant date can be substituted for original cost.

For example,

Shane purchased an investment flat in Kensington in 2000 for £500k. Shane left the UK on 5th April 2015 and at that time the flat was valued at £1.5m. Shane now decides to sell the flat and is given a current value of £2m. Ordinarily, Shane would have a gain of £1.5m (£2m less £500k.) He could now opt to have the value as at 5th April 2015 as his base cost. His gain would therefore be £2m less £1.5m. The gain is reduced by £1m.

The gain must be reported online to HMRC within 60 days of the completion of the sale. Any capital gains tax must also be paid within 60 days.

If you own another property, whether it is in the UK or not, you will be liable to pay the 5% higher rate SDLT when purchasing a property in the UK.

Non-residents will also have to pay an additional 2% surcharge on the purchase of any residential property for costing more than £40,000. Non UK resident for these purposes means that you were not present in the UK for at least 183 days in the year prior to the date of purchase. So, whilst you may be resident for Income Tax purposes, you may not be resident for Stamp Duty Land Tax purposes.

You are required to file an online disclosure and pay any CGT within 60 days of the completion of the sale.

Please see the following guide to non resident capital gains tax to read more filing requirements.

It is no longer a simple matter of limiting your time in the UK to a number of days. This can be a complicated matter and we advise that you seek professional advice. Please also see our guide to the Statutory Residency Test.

When you move in or out of the UK, the tax year is usually split into 2 – a non-resident part and a resident part. This means you only pay UK tax on foreign income based on the time you were living here. This is called ‘split-year treatment’.

For more detailed guidance on this please see the split year treatment and HMRC guide.

The Statutory Residency Test (SRT) allows you to work out your residence status for a tax year. Each tax year is looked at separately, so you may be resident in the UK in one year but not the next or vice versa.

The SRT takes into account the amount of time you spend and where relevant, work in the UK along with any ties you have to the UK.

This can be complicated and you should seek professional advice if in doubt. For more detailed guidance please see the UK tax residence article which covers this in more detail.